Nigeria's Central Bank Demands Faster Response to Surge in Digital Payment Fraud

Nigeria's financial regulators are urging banks to slash fraud response times to under 30 minutes as emerging electronic fraud threats continue to challenge the country's rapidly expanding digital payments ecosystem. The call came at the 2026 Nigeria Electronic Fraud Forum (NeFF) Technical Kick-Off Session in Lagos, where regulators, banks, payment service providers and law enforcement agencies gathered to address growing vulnerabilities in Nigeria's digital financial infrastructure.

Background and Context

The urgency of the crackdown follows alarming trends in Nigeria's financial sector. According to the CBN's Financial Stability Report 2024, fraud cases surged by 45% in just one year, with 70% of losses traced to digital channels, particularly unregulated virtual asset platforms. The rise in fraudulent activity coincides with Nigeria's accelerating transition toward digital payments, driven by increasing mobile penetration and government initiatives to promote financial inclusion. More than 30 Ponzi-style investment schemes exploiting digital currency narratives have been flagged by securities regulators and other agencies, highlighting the sophistication of emerging fraud patterns.

Key Figures and Entities

Leading the regulatory response is Philip Ikeazor, Deputy Governor for Financial System Stability at the Central Bank of Nigeria, who emphasized that emerging threats now require "faster, integrated and proactive responses" across the entire financial industry. Speaking through Ibrahim Hassan, Director of the Development Finance Institutions Supervision Department, Ikeazor identified social engineering, SIM-swap abuse, insider compromise, and Authorised Push Payment (APP) scams as the most pressing concerns. The Nigerian Inter-Bank Settlement System (NIBSS), represented by its Managing Director Premier Oiwoh, reported encouraging progress, confirming that electronic payment fraud losses fell significantly in 2025 despite rising transaction volumes across digital channels.

Legal and Financial Mechanisms

The industry's coordinated approach under the NeFF framework since 2011 has yielded measurable improvements. Key achievements include the migration to EMV chip-and-PIN cards, deployment of two-factor authentication, enhanced transaction monitoring, and centralized fraud reporting systems. Critical to these efforts has been the integration of the Bank Verification Number (BVN) with the National Identification Number (NIN), creating a more robust identity verification framework. Oiwoh emphasized the importance of effective Know-Your-Customer (KYC) and Know-Your-Device (KYD) processes, supported by real-time validation of national identification systems. A central "Persons of Interest" database now covers more than 13,000 individuals, significantly enhancing fraud detection capabilities.

International Implications and Policy Response

While Nigeria has made progress in reducing fraud losses relative to transaction growth, internet banking and e-commerce platforms remain particularly vulnerable channels. The persistence of social engineering and insider-assisted fraud schemes highlights the need for continuous adaptation of regulatory frameworks. The CBN's focus on implementing ISO 20022 standards and strengthening identity management reflects broader global efforts to combat increasingly sophisticated cross-border financial crime. However, weak reporting practices, inadequate identity verification, and abuse of transaction limits continue to expose the system to significant risks. The deployment of advanced AI-driven monitoring tools and new national payment infrastructure represents Nigeria's next frontier in fraud prevention while pursuing deeper financial inclusion.

Sources

This report draws on statements and presentations from the 2026 Nigeria Electronic Fraud Forum (NeFF) Technical Kick-Off Session, the Central Bank of Nigeria's Financial Stability Report 2024, and public remarks by officials from the CBN and Nigerian Inter-Bank Settlement System (NIBSS) between 2024 and 2026.